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2017 (8) TMI 858 - HC - Income TaxAddition u/s 69C - CIT(A) confined the addition to only 5% of the amount spent on purchases based on past record of profits - sufficient good cause from submitting the explanation to justify the expenditure Held that:- In the facts and circumstances of the present case, the assessee could not submit the explanation within the time allowed due to his death and the heirs were unable to explain the same as they had no knowledge of the business of their deceased father. The assessee and his heirs were prevented for sufficient good cause from submitting the explanation to justify the expenditure or its source. One cannot loose sight of the fact that in situations where the proprietor of the business dies and his heirs are not in business or are not connected with the business of the deceased they may not be in a position to furnish any explanation about the business. There may be cases where they may be living and serving outside and are totally unconnected with the business of the deceased. Therefore, it is to meet such type of contingency that the legislature in its wisdom has conferred a discretionary jurisdiction upon the Assessing Officer to add or not to add such unexplained expenditure in the income of the deceased even if there is no explanation. It is the most appropriate case where such a discretion ought to have been exercised by the Assessing Authority in favour of the assessee by not adding the unexplained expenditure in the income of the assessee inasmuch as the assessee could not furnish the explanation for reason beyond his control. The question answered in favour of the assessee and against the department and it is held that as the provision of Section 69C of the Act is not mandatory in nature, the Assessing Authority has full discretion either to add or not to add the unexplained expenditure in the income of the assessee based upon sound judicial principles and therefore, the Tribunal has not committed any error of law in affirming the order of the C.I.T. (Appeals) by which the addition under Section 69C of the Act has been confined to only 5% of the expenditure.
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